IMPROVEMENT IN BUSINESS

Press, Volume LXXI, Issue 21404, 21 February 1935, Page 5

IMPROVEMENT IN BUSINESS

LOANS BY BUILDING SOCIETIES VALUABLE OPPORTUNITIES FOR SAVING 1 The increase in the number of dwelling houses built in the last year has had a beneficial effect on the business of building societies. A definite improvement has been noticed by one of the leaching institutions of that nature in Christchurch, and it is considered that the experience of this society is shared by others in the city. Although during the depression there has been little, if any, noticeable variation in the number of peop le wishing to place money on fixed deposit, the number wishing to obtain loans on new dwellings decreased rapidly from 1928 to 1931. Since then the position has been improving, but as yet the state of this phase of building societies' business is not as healthy as it was just before the depression began. However, the improvement in the number of persons wanting loans for new houses is an encouraging indication of a return to prosperity. The steady return to the conditions of eight or nine years ago is well illustrated by figures supplied yesterdav by the secietaiy of one of the oldest . established building societies in Christchurch to indicate the improvement in the number of applications for loans for new dwellings. Figures for Seven Years The figures, for the last seven years, are as follows: — 1928 .. •• •' It? 1929 .. •• •• o 1930 .. •• •• " 1931 .. •• •• 4 1932 .. "no 1933 .. •• ■■ of 1934 •• •• •• It was stated that much the same improvement was apparent m the number applying for loans to enable them to buy houses that had been built for some years. However, all along there has been plenty of money available for fixed deposit, which represented the main phase of the society s business. ~, . ... 1 To help in the saving of the initial deposit needed before building can be commenced building societies have various investment schemes, but it was claimed by the secretary inteiviev,ed that the habit of saving had gone out of fashion among young people. He said that when subscription shares by which a person may pay sraall amounts monthly over a period of years were made available in the early history of the society, the idea was to encourage young people to be thrifty, so that when they wanted to make a home they would have the money to buy a section, and then be able to raise the money for building by a mortgage. * In the 'seventies, 'eighties./and possibly the 'nineties, young people on obtaining a billet conserved their savings carefully, and took advantage of the assistance"- that was offered by building societies. But nowadays the average young man or woman was not of the saving disposition. There was, of course, no lack of people willing to take up subscription shares, but it wae felt that these people were not , those the society had in mind when the system was inaugurated. Subscription shares were regarded by people now as an investment which brought higher interest rates than could be offered by the_ sayings bank, for example, and their aim in investing was not to have enough money to allow them to build a home, but to get a lucrative return for their money. That had led his society some years ago to stop issuing subscription shares.

Encouragement for Home-makers

Subscription shares are offered by other building societies in the city, but whether they are available or not, there is plenty of opportunity and encouragement for the home-maker to be thrifty. For example, there must be thousands who could never have set aside a sum equivalent to the amount they are prepared to repay to a building society over 15 or 21 years. By taking advantage of the table mortgages offered by the societies

they are saved the worry, and expense incidental to the rearranging of rmance every three or four years, asi is ire quent with mortgages where the prin cipal is fixed, while the Payments they make of principal and interest are in lieu of rent. They are enabledl to iand the money regularly, and they do so the more cheerfully in the knowledge that they are investing, and not spending these sums. . , ... Thus it is not surprising. that with a keen appreciation of the in vestment value of money, the service it can give and the satisfaction that, accompanies proprietorship and independence, more men and women to-day are buying houses instead of renting them. With each payment they approach the day when the homes in which they take so much interest will become their own. _______